Once installed, restart GNOME Shell (press ALT + F2 and enter "r" or log out and log back in), then activate the extension using GNOME Tweak Tool (shows up as "Advanced settings" in the Activities "menu").

Tip: to avoid getting both the standard Pidgin notifications and the new ones, in Pidgin select Tools > Plugins and uncheck the box next to "Libnotify Popups".